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Alameda Municipal Power celebrates 125th birthday

Alameda Municipal Power celebrates 125th birthday

Michele Ellson

Friday, June 29, 2012 - 00:05

In 1887, the City of Alameda took ownership of one of the nation’s first municipal power plants. And even then, the utility generated controversy. The city’s price tag for purchasing the 90-kilowatt plant from Jenney Electric Company, which was building plants all over the country and had constructed this one at the corner of Park Street and Otis Drive, was $40,000 – twice its contracted construction cost.

But Alameda’s Board of Trustees was determined to proceed and on July 11, 1887 the city entered the power business. And over the 125 years that have followed, the utility has generated controversies but also praise for providing reliable, low-cost electricity to Island residents and for its trend-setting green power portfolio.

Alameda Municipal Power celebrates this milestone with opportunities in the form of the sale of its money-losing cable and Internet business and a marketable green power portfolio that is expected to generate $4.9 million toward broader efforts to enhance the utility’s efforts to be environmentally conscious. But the utility is also struggling with rising power and transmission costs and an aging workforce that will be difficult to replace.

It’s one of 35 municipal electric companies in California, which together provide 25 percent of the state’s electricity. Three private utilities provide the other 75 percent.

Alameda’s utility got its start providing street lighting, according to a history posted on Alameda Municipal Power’s website, and its street lighting system – which earned Alameda a reputation as the best-lit city in the Bay Area – would ultimately serve as a model for other urban systems across the nation. (It’s a system that was most recently maintained in part by the city’s Public Works department; AMP resumed full control of the city’s streetlights this year.)

The utility shuttered its power plant in 1920, and it has purchased its power from other producers ever since. As part of the Northern California Power Agency – a consortium of public utilities the city’s electric company has belonged to since its inception in 1968 – AMP gets power through the agency’s geothermal, hydroelectric, combustion turbine and other projects (fun fact: two of the agency’s combustion turbine projects are here in Alameda), along with other contracts; it had purchased power from PG&E until 1982.

But while AMP’s rates are roughly 20 percent lower than PG&E’s – the primary electricity provider here in the Bay Area – the utility is still susceptible to rising power and transmission rates, and it has inched up rates as a result.

AMP has endured scandals during the course of its 125 years of operation. In the 1930s, the city’s newly hired city manager fired the then-head of what was long known as the Bureau of Electricity and hired his own man, according to the utility’s history. (The manager, B. Ray Fritz, was convicted of perjury and inducing a witness to provide false testimony in a case that saw the city’s then-mayor and two council members convicted on petty theft charges.)

Decades later, the utility – which became Alameda Power & Telecom in the late 1990s, to reflect city leaders’ decision to enter the cable and Internet business – was engulfed in a fresh scandal when the city’s treasurer, Kevin Kennedy, discovered the electric side of the company had lent the telecom startup nearly $44 million, an apparent violation of promises made to voters who approved the move into the telecom business. The city sold its telecom business to Comcast for $17 million in 2008, and was promptly sued by investors. Prior the lawsuits, reporters determined that the venture cost the city and its utility $60 million.

But while the utility has suffered scandals, it has also emerged as a pioneer on a number of fronts. In addition to providing cutting-edge streetlights at the turn of the century, the utility in the 1930s was one of the nation’s first agencies, public or private, to obtain a “general experimental station” license from the federal government, its history said. With license in hand, it built one of the nation’s first two-way radio systems, for the Alameda Police Department, along with a citywide fire alarm system.

It also has been a leader in procuring green power. Eighty-six percent of its power comes from renewable sources including wind, solar, geothermal and landfill gas (power that is generated by large hydroelectric projects is counted in the number, though not considered eligible to be counted as renewable by the state). The utility – which installed its first solar generation plant on a garage roof at its service center in 1998 – has taken to calling itself “The Greenest Little Utility in America” for its power portfolio.

The utility struggled when Naval Air Station Alameda shut down in 1996; the base had been its biggest customer and a source of a third of its revenues. The Maritime Administration, which operates out of Alameda Point, is AMP’s largest customer now. But while Californians in many other cities experienced rolling blackouts amidst heat waves and wild power price swings, the lights for the most part remained on in Alameda.

These days, the Public Utilities Board and General Manager Girish Balachandran are focused on strengthening the utility’s core electricity business and service to 34,000 customers at a time when costs are rising and its workforce is aging. The 90-employee utility has a budget of $57.2 million this year, with a $4.2 million deficit to be covered by reserves.

The utility will be marking its 125th with a series of events. It partnered with Tucker’s Ice Cream in a “Name the Ice Cream” contest (Winner: Benjamin Gleitzman, with Marshmallow Megavolt) and is hosting a series of events, including a special talk that will be given by Alameda historian Woody Minor at 7 p.m. July 26 at the Alameda Museum.

Alameda Municipal Power: A Timeline

1885: Jenney Electric Company, under contract with the city, builds 90-watt power plant at the corner of Park Street and Otis Drive.

July 11, 1887: Alameda Board of Trustees votes to purchase the power station for $40,000, despite controversy over the cost and source of funding.

1920: City shuts down its power plant after oil prices top $1 a barrel. The Department of Public Utilities buys power from other companies; initial power source is Oakland’s Great Western Power Company, which is later absorbed by Pacific Gas & Electric.

Early 1930s: City obtains federal license allowing its utility to build the nation’s first two-way radio system, for the Alameda Police Department.

Mid-1930s: Department of Public Utilities becomes Bureau of Electricity.

1998: Alameda voters sign off on a plan to enter the telecommunications business; Bureau of Electricity becomes Alameda Power & Telecom in 1999, and the city signs up its first cable customer in 2001.

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